The good, the bad and the ugly of performance management

Managing talent is one of the most important things that a business can do. Talent needs to be managed effectively – and professionally – in order to get the most out of your team. Here we consider how best to manage talent in order to retain your star performers and how to boost the performance of those who are causing problems, while avoiding common pitfalls.

The good

It's as important to manage your star performers as it is to try and improve the productivity of those who are struggling. Trying to ensure that they remain engaged and committed to the business requires a fair amount of attention, and is often overlooked by stressed managers who spend much of their days fighting fires. As the saying goes, "If it ain't broke…" and yet if it ain't broke it's likely to be an attractive hire for one of your competitors, leaving you fighting yet more fires, but with a weaker team.

It's therefore important to ensure that these employees are properly rewarded. And we're not just talking about money (although that helps). A simple 'thank you' in private may be sufficient, but often recognition within the team and the business more generally can pay enormous dividends. If the individual feels valued, chances are they will work harder and be more loyal to you. On a medium to long term basis, this can come from promotion within the hierarchy of your business; however, more immediate, publicly recognising good work is important. It's good to be specific about what has been done well – demonstrating that hard work leads to reward.

It also pays to ensure that you consider what that person wants and needs from their career. If they feel challenged (but not overstretched), they will remain engaged. Identifying areas that they would like to develop (or which you need them to develop) is important and if you can provide them with training (either from others within the business or from an external source), this will help. You should also, however, be clear about what they need to do to improve in their day to day work, and don't let this slip just because they are good at other things. Being consistent helps the good performer while avoiding issues with poor performers who feel unfairly treated.

The bad

However, the team members that usually take up managers' time are those who are not meeting expectations. Whether it's because of lack of training, lack of experience, lack of talent or simple laziness, these are the employees who are more likely to cause complaints from clients (whether internal or external) or colleagues. Managers will find themselves spending more time in meetings trying to rectify problems if they are not identified and dealt with at an early stage. Unfortunately, it often seems easier at the time to ignore the small problems if you are having to deal with much larger ones elsewhere (or, indeed, are trying to get on with running a business).

One of the hardest things is trying to find the "right" time as much as finding the time. It's therefore good to try to give immediate feedback on tasks as well as to build in short, informal monitoring meetings with all team members on a regular basis as platforms to discuss – both positive and negative work. While appraisals are enormously important, they don't happen often enough and aren't appropriate forums in which to discuss the small stuff; a golden rule with appraisals is also that they should not contain anything that comes as a surprise to the employee.

During these informal meetings, make sure that you are being consistent and fair, and be as constructive as possible, giving 'SMART' targets where appropriate. ACAS has a good range of examples of SMART objectives, found here (page 15).

The ugly

Sometimes, things don't improve, even if you are being as attentive as possible. And if they don't, you will need to have a 'difficult conversation'. This may be the beginning of a formal performance review process, or it may be a prelude to one. Before you embark on anything more formal, you will need to be aware of your legal obligations in relation to performance procedures – for key points, see below.

Many people find confrontation daunting, However, approaching the conversation as a way of giving some constructive criticism, rather than a 'telling off', may have an effect on the way your underperforming employee views it, and will hopefully reduce the chances of them reacting negatively and defensively.

It helps to plan the meeting as much as you can. Have in mind the following:

Where are you going to have the meeting?

Who’s going to sit where?

What do you want to cover?

What do you want to achieve?

What are the facts? Get them straight before you start.

How are they going to react?

What if they don’t react in the way you expect?

What emotions are you bringing to the meeting?

Are you being fair? Would you give one of your star performers a hard time for the same behaviour?

Turn off your phone!

When you are in the meeting, remain in control by sticking to your agenda and setting out your concerns. It is important not to descend into argument or to get emotional either in your language or your actions. Listen to what the employee has to say, and don’t be afraid of silence - sitting and waiting for them to fill the gaps in the discussion can be revealing. If necessary, let them blow off steam as allowing them to vent their feelings may help, as long as you remain calm and consistent.

Open the meeting by telling them what you would like to achieve from the meeting and ask them their permission to continue. It is often wise to start by acknowledging the employee's strengths before clearly setting out the problem, and giving them an opportunity to outline their views. Challenge any inconsistencies in their version of events by pointing out facts, but do so in order to get them to recognise the gap between their perception and reality, rather than in order to win an argument. When you've finished discussing the problem, and hopefully once they've acknowledged that a problem exists, invite them to propose a solution. Tailor this to ensure that it will work from your point of view, and agree the plan of action.

Following the meeting, document what was said and either send this to the individual or put it on file if that's more appropriate. Make sure that you follow up what was agreed in the meeting and then monitor the situation and provide the employee with support and feedback. If they've managed to turn the situation around, remember to say so! Hopefully, you will find that you start spending time with them as one of your star performers, rather than as one of the fires to fight.

The legal

If a performance issue leads to dismissal then the procedure used by the employer will be key to determining whether or not that dismissal was fair. An employee with more than two years' service has the right not to be unfairly dismissed and may bring a claim in the employment tribunal. Apart from ensuring that poor performance is the real reason for the dismissal, the employer must give the employee a proper opportunity to improve and also needs to do the following to avoid the risk of a claim:

Where the issue cannot be resolved informally, invite the employee to a formal meeting to discuss their performance and agree a realistic and feasible plan for improvement. The employee has a right to be accompanied by a colleague or trade union representative to the meeting, and any further meetings.

Confirm the improvement plan in writing and warn the employee that if they do not improve sufficiently there will be a further meeting and a further or final improvement plan.

Give at least two opportunities/periods to improve, and monitor progress.

If the final plan is reached, the employee must be warned that this is the final chance to improve and that a failure may result in dismissal.

Always have a final meeting before any decision to dismiss is made, at which the employee has the chance to have their views considered, and the nature of which will have been set out in the written invitation (including the risk that the outcome may be dismissal).

Dismiss on notice or payment in lieu of notice and confirm the reasons for and the procedure leading up to dismissal in the dismissal letter.

Give the employee a right to appeal each formal decision of the procedure, including dismissal.